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February 1, 2013

Senate Legislation Would Block New Funds to CFPB Pending Confirmation of Director

By Jim Hamilton, J.D., LL.M

In the wake of a DC Circuit opinion striking down the presidential recess appointments to NLRB members, Senators Mike Johanns (R-Neb.), Lamar Alexander (R-Tenn.) and John Cornyn (R-Texas) introduced legislation prohibiting the NLRB and the Consumer Financial Protection Bureau (CFPB) from enforcing or implementing decisions and regulations without a constitutionally confirmed board or director. Richard Cordrey, CFPC Director, is also a presidential recess appointment whose appointment is being challenged in a federal court action. The Restoring the Constitutional Balance of Power Act also blocks the CFPB's next transfer of funds from the Federal Reserve to carry out any actions that require the approval of a CFPB Director. The funding is automatically restored when the Senate confirms a CFPB Director.

Noting that the agencies have been operating under a ruse for more than a year, Senator Johanns said that any decisions or regulations made by the people who have no right to be there are invalid. The legislation forces them to stop functioning as if they legitimately hold office and recognize the reality that the President overstepped his constitutional authority, the Senator emphasized. The DC Circuit Court of Appeals ruled that President Obama violated the Constitution when he made the appointments to NLRB without confirmation by the Senate. According to the Senators, the President took the same unconstitutional actions with Richard Cordray, who they maintain has been illegitimately serving as CFPB Director under the same circumstances.

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